Anyone who is anyone in Israel will come to Herzliya this week for aconference about the state of the Jewish nation. Our correspondent joinedthem and found a climate of unprecedented insecurity – and paranoia

So the propaganda war is on. Forget Israel's invasion of Lebanon in 1982 andthe 15,000 Lebanese and Palestinian dead. Forget the Sabra and Shatilamassacre that same year by Israel's militia allies as their troops watched.Erase the Qana massacre of 1996 – 106 Lebanese killed by Israeli shellfire,more than half of them children – and delete the 1,500 in the 2006 Lebanonwar. And forget, of course, the more than 1,300 Palestinians slaughtered byIsrael in Gaza last year (and the 13 Israelis killed by Hamas at that time)after Hamas rockets fell on Sderot. Israel – if you believe the securityelite of Israel's right wing here in Herzliya – is now under an even moredangerous, near-unprecedented attack.

Britain – this came yesterday from Israel's ambassador in London, no less –is "a battlefield" in which Israel's enemies wish to "de-legitimise" the62-year-old Jewish state.

Even Israel's erstwhile friend, that fine Jewish judge Richard Goldstone, isnow, in the words of one of Israel's staunchest American-Jewish supporters,Al Dershowitz, an "absolute traitor to the Jewish people" and "an evil, evilman". (Headlines for this, of course, in Israel yesterday.)

Israel under siege. That was the dreary, familiar, hopelessly misunderstoodtheme at the 10th annual Herzliya conference of diplomats, Israeli civilservants, military gold braid and government yesterday.

Israel the underdog. Israel the victim. Israel whose state-of-the-art,more-moral-than-any-other army was now in danger of seeing its generalsarraigned on war crimes charges if they set foot in Europe.

Heaven forbid that Israeli officers should ever be accused of atrocities!The Jerusalem Post yesterday carried a photograph of Kadima leader TzipiLivni looking at a Krakow poster abusing her as "wanted for war crimes inGaza". Forget that she did nothing as Foreign Minister when the Israelisrained phosphorus on Gaza. This whole judicial attack on Israel was anabuse, a deliberate use of international law to de-legitimise the state ofIsrael – like all the other condemnation of Israel. Would that it was. Thiscurrent identity crisis is indeed a tragedy for Israel – though not in theway that its right-wing government now suggests.

I remember all too well how, after the disastrous Israeli invasion ofLebanon in 1982, a huge London conference sought to find out how Israeli"propaganda" failed. Never mind the slaughter of the Lebanese and thegrowing Israeli military casualties. How come Israel's message didn't getacross? How come the anti-Semitic press was allowed to get away with suchcalumny? It was an identikit forum to this week's Herzliya confab.

Today we must forget Operation Cast Lead against Gaza and its savagecasualties. We must condemn the Goldstone Report for its unspeakable lies –that the army of good may have committed war crimes against the terroristsof evil – and realise that Israel only wanted peace.

In reality, Israel has made a series of terrible diplomatic mistakes. I'mnot talking about the humiliation heaped on the Turkish ambassador by DeputyForeign Minister Danny Ayalon – he, too, was at Herzliya. I'm not referringto the preposterous complaints by Ron Prossor, the Israeli ambassador toBritain, that in times of crisis there was "a cacophany of voices fromIsrael", rather than a single voice.

No, Israel's gravest mistake in recent years was to refuse to contribute toGoldstone's report on the 2008-09 slaughter in Gaza. A "foolish boycott",the daily Haaretz called it. A disaster, according to Israel's liberal left,who rightly spotted that it placed Israel on the level of Hamas.

I have sat through hours of the Herzliya conference – it ends with PrimeMinister Benjamin Netanyahu's cheerleading for the masses tomorrow night –and the Goldstone Report and the fear of "de-legitimisation" has run like athread through almost every debate.

I sat next to an Israeli PhD student yesterday who shook his head indespair. "I and my friends are filled with terrible disappointment when wehear these statements from our government. What can we say? What can we do?"It was an enlightening comment. Is this not what millions of British peoplesaid when Tony Blair took them to war on a sheaf of lies in 2003?

One of the most distressing moments at Herzliya came when Lorna Fitzsimons,former Labour MP and now head of Bicom, a British-based pro-Israelithink-tank, pointed out that "public opinion does not influence foreignpolicy in Britain. Foreign policy is an elite issue." Deal with the elite,and the proles will follow – that was the implication. "Our enemies aregoing out to international courts where we are not supreme," she said.

And that, in a sense, said it all. International legitimacy is what Israeldemands. And as a state it is legitimate. It was voted into existence by theUnited Nations. And, as the Israeli historian Avi Shlaim has said, itscreation may not have been just – but it was legitimate. Yet when aninternational juridical team invited Israel to participate in its inquiries,Mr Netanyahu smugly refused.

In this sense, the Gaza war proved what is so deeply troubling about thecurrent Israeli body politic. It wants the world to recognise its democracy– however flawed this may be – but it will not join the world when asked toaccount for its behaviour in Gaza. It claims to be a light among the nationsbut will not let anyone look too closely at that light, to examine its fueland to look precisely at what it illuminates.

Goldstone, Goldstone, Goldstone. The eminent lawyer who so bravely soughtjustice for the murdered and raped victims of the Serbs in the Bosnian war –and whose bravery inspired the world, including Israel, at that time – hasbeen on the lips of every Israeli government apologist at Herzliya.

Tzipi Livni spoke of him. So did Yossi Gal, the Israeli foreign affairsministry director-general. He spoke of the "attempt to use the GoldstoneReport to push Israel to the margins of legitimacy". So did Malcolm Hoenleinof the Conference of Presidents of Major American Jewish Organisations. Henoted that the US administration had been "overwhelmingly responsive" – iedismissive – of the Goldstone Report. Even the mouse-like US ambassador toIsrael, James Cunningham, suggested that the Goldstone Report might be usedas an attempt to de-legitimise Israel.

What is this nonsense? After the 1982 massacre of Sabra and ShatilaPalestinians, Israel appointed a government commission of inquiry. The KahanCommission's report was not perfect – but what other Middle Eastern nationwould examine its sins so courageously? It stated that the then DefenceMinister Ariel Sharon's responsibility – he had sent in the Lebanesemilitias – was "personal". This report did not expunge Israel's guilt but itproved that it was a worthy state, one that was prepared to confront thisslaughter with honesty rather than abuse.

Alas, no Kahan Commissions for Israel today. No judgment for Gaza. Just aslap on the wrist for a couple of officers who used phosphorus and acriminal charge against a soldier for stealing credit cards.

As it happens, I met Goldstone after he was appointed head of the war crimestribunal for ex-Yugoslavia in The Hague. A palpably decent, honest man, hesaid that the world had grown tired of allowing governments to commit warcrimes with impunity. He was talking, of course, about Milosevic. He wrote abook on the same lines, warmly praised by Israel. But now he is theearthquake beneath Israel's legitimacy.

I dropped by the eminently sensible Israeli army reserve colonel ShaulArieli at his NGO's office in Tel Aviv yesterday afternoon and discussed theattempts to arrest Israeli military officers for war crimes if they visitedBritain and other European countries.

"All this is much more disturbing to us today than it was a few years ago,"he said. "We are afraid of this trend after Operation Cast Lead. It affectsthe image of Israel all over the world, not just for military officers. Ifthey were charged, it would show that the state of Israel couldn't protectits soldiers. I am sure that the Goldstone Report affects these things."

All of which suggests that the real earthquake beneath Israel, the realdanger to its image and standing and legitimacy, is a nation called Israel.

WILLIAM GREIDERnational affairs, The Nation magazine, author ofONE WORLD READY OR NOT: The Manic Logic of Global CapitalismCOME HOME, AMERICA: The Rise and Fall (and Redeeming Promise)of Our CountrySECRETS OF THE TEMPLE: How the Federal Reserve Runs the Country

I've been trying to book William Greider ever since I read an article of hislast August about restructuring the Federal Reserve. For some, the Fed isthe at the center of all that ails us. For others, it is the right place tohouse any new financial regulatory powers we might gain as a result of thecurrent crisis.

There are now 32 co-sponsors for S604 in the Senate and 317 for HR1207 inthe House for bills to audit the Federal Reserve, and 95,000 have signed apetition at http://www.auditthefed.com/

Just yesterday The U.S. Court of Appeals for the Second Circuit in New Yorkruled the Federal Reserve must disclose the names of banks that could havecollapsed if they had not received emergency loans.

Greider wrote perhaps the finest book on the Federal Reserve and alwaysseems to keep an eye on its secretive and too powerful ways. He challengedGreenspan and Paulson long before it was fashionable. And he was right.

We'll focus on the Fed and deal with other economic and political issues ifwe have time.

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Swing Riots Concert July 17th

In a Benefit Concert for FolkWorks

July 17th at 2 PM

at the

Tropico de Nopal Gallery, in Los Angeles, 1665 Beverly Boulevard, East of Alvarado.

SwingRiots is an LA Jazz Gypsy Balkan Klezmer Folk ensemble with six versatile fully digitized members who recreate the brilliant music of two-finger Belgian Gypsy guitarist Django Reinhardt— quite a feat, in that it takes them only sixty fingers to accomplish what Django did with two. Perhaps that’s why the word genius is so often found within two syllables of Reinhardt’s legendary name.

But if you close your eyes, it hardly matters; you can drift back in time to the sweltering erotic nights of Paris’s Left Bank in the 1930s, when Reinhardt was remaking the landscape of modern Jazz, and having to relearn the guitar after suffering major burns in a 1928 fire that changed his life and modern music forever. Without the use of the third and fourth fingers on his left hand he played everything with just the two he had—and that proved to be enough.

Ed Pearl has done a bit of his own reshaping of the musical landscape of Los Angeles, as the creator of the legendary folk music club The Ash Grove in 1958, and had Django Reinhardt not passed away in 1953, he would surely have graced the Ash Grove stage as well, along with Muddy Waters, Bill Monroe, the New Lost City Ramblers, The Greenbriar Boys, Phil Ochs, Mance Libscomb, Lightning Hopkins, Flatt and Scruggs, Mississippi John Hurt, Jackie DeShannon and Ry Cooder.

Now Ed has embarked on a new venture, catching up with lost time as it were, and will present SwingRiots in his new summer concert series sponsored by Ash Grove Music (www.ashgrovemusic.com).

It will be a doubly special event, since it is a benefit concert for FolkWorks, LA’s free and only folk music magazine, now in its tenth year of continuous publication, covering the waterfront of LA’s sometimes bewildering variety of folk related solo performers, dance and instrumental groups and festivals, as well as national touring artists that come through town.

FolkWorks (www.folkworks.org) was just honored this past May with the Topanga Banjo-Fiddle Contest Music Legend Award for 2011, and needs the influx of funds from this extraordinary concert to keep the presses rolling, as it tries valiantly to beat the odds that have made magazine publishing a quixotic and oft-times heroic endeavor.

So support the Ash Grove, support FolkWorks, and enjoy an unparalleled afternoon of world music from the Lost Generation that these wonderful Los Angeles musicians have rediscovered, mastered and made their own. For this musical experience of a lifetime SwingRiots will be joined by vocal duet Jess Basta & Christine Tavares, formerly of VOCO in a variety of Yiddish and early jazz standards. Don’t you dare miss it! --Ross Altman